Capital Etymology
#AES #Bitcoin §52
In our hyper-financialized, fiat world, it’s easy to lose sight of what built wealth in the first place. Adam Smith’s Wealth of Nations, published in 1776, was a good framework contributing to the U.S.’s success over the past 250 years. Adam Smith defined capital as "that part of man's stock which he expects to afford him revenue."
Capital Etymology
#AES #Bitcoin §52
In our hyper-financialized, fiat world, it’s easy to lose sight of what built wealth in the first place. Adam Smith’s Wealth of Nations, published in 1776, was a good framework contributing to the U.S.’s success over the past 250 years. Adam Smith defined capital as "that part of man's stock which he expects to afford him revenue."
WHAT IS CAPITAL?
#AES #Bitcoin §51
We are most happy when we are productive. Capital is a force multiplier for human productivity. Capital starts with surplus commodities. Fungible value, such as barley, cattle, or a case of good wine without sulfates. Tradeable surplus. Tradeable assets.
#AES #Bitcoin §50
Unit of Account
As Bitcoin’s inflation rate moves to zero, ideal money will become the best:
• Store of Wealth.
• Medium of exchange for large transactions.
• Medium of exchange for everyday transactions.
• Unit of account…a natural step as Bitcoin layers accelerate the velocity of value.
#AES #Bitcoin §49
Medium of Exchange for Everyday Transactions
Bitcoin’s first-layer network is not practical for buying a cup of coffee. Lightning Network is one example of a second layer. There will be many second layers enumerated in satoshis or sats. There are 100 million sats per Bitcoin.
#AES #Bitcoin §48 Medium of Exchange for Large Transactions
With Bitcoin, there is no international border concept. No transfer limits. With Bitcoin, more than one billion dollars is transferred from the U.S. to anywhere in the world for less than one U.S. dollar, and within three confirmations, about thirty minutes, the transaction is considered immutable. No authority in the world can censor, change, or reverse that transaction on Bitcoin’s first-layer network.
#AES #Bitcoin §47 Store of Wealth
Bitcoin is a superior store of wealth to all other forms of money, including gold. The decline of the Roman Empire was characterized by the steady debasement of the currency. The U.S. Empire is following the same path as the Roman Empire and the Soviet Union. No empire lasts forever.
#AES #Bitcoin §46 Bitcoin Burns the Present for the Future
Bitcoin is the perfect battery. A perfect capital flywheel. Nothing is lost. Not one Satoshi. It does not leak your precious time, your energy, or your value. Your value does not melt nor evaporate. The decentralized network and Proof-of-Work protect your value. In the future, you will be able to spend your value, your energy.
Central banks, their cronies, and other fiat cartels don’t like the twenty-one million fixed units and don’t like Proof-of-Work because they can no longer spend your future. Bitcoin breaks the magic money printer.
#AES #Bitcoin §45 Fiat Burns the Future for the Present
The U.S. dollar CPI averages 4%, but even this is a low estimate. Central bankers cook the books to hide money printing. They need inflation or debt-based assets collapse. Fiat bankers align with pro-growth anything, including high-fertility organizations.
#AES #Bitcoin §44 BITCOIN’S PATH TO MONETIZATION
Fiat can’t compete with other Bitcoin attributes:
• Decentralized.
• Fair distribution.
• Open source.
• Public ledger, symmetric information.
• No asymmetric trading against the public.
• Most important, Bitcoin’s inflation is going to zero.
• Without inflationary debasement, fiat debt implodes.
#AES #Bitcoin §44 BITCOIN’S PATH TO MONETIZATION
Gold, silver, and tradable surplus represent a commodity-based monetary system. With knowledge and productivity growth, commodity-based monetary systems are Booth-deflationary. The price of living goes down. Great for the wage earner. Bad for debt-based assets.
#AES #Bitcoin §43 Debt Supercycle Implosions
The debt supercycle is a recurring pattern:
• Debt builds,
• The velocity of value slows,
• Money dies, malaise,
• Eventually, the pitchforks come out,
• War, guillotines, and debts are destroyed, and
• A new power establishes or resets with a new ledger.
Which ledger will replace the petrodollar? Can it be different this time? A transition without violence? Perhaps peaceful Bitcoin will emerge instead of another top-down artificial fiat.
#AES #Bitcoin §42 Fault Isolation
This is a method of detection by isolation. Failure to isolate an electrical fault may require replacing multiple systems. With a monetary system, fiat is an electrical short or a hydraulic leak.
Bitcoin is ideal. A closed system of twenty-one million. Value flows without loss. Without inflation. Bitcoin follows the Law of Conservation. Fiat does not. Fiat is designed to debase. Designed to leak. Fiat is not ideal money.
#AES #Bitcoin §41 Electrical Shorts Are Bad
The first law of thermodynamics is a universal law and can be applied to a closed system. Energy is converted from one form to another, but it cannot be created or destroyed. An application of the Law of Conservation can be observed with a hydroelectric power plant. Water flows downward onto a turbine. This, in turn, rotates the turbine and generates electricity.
The electric circuit is a continuous path from the energy source to the load. The electric circuit is a loop. A short circuit may cause a fire, electrical burn, or electrocution. Fixing a short circuit is not easy. Fault isolation is one method.
#AES #Bitcoin §40 Hydraulic Leaks Are Bad
With a leak, the hydraulic system is broken. The pump will work to compensate for the loss. As the leak grows bigger, the pump must compensate more and more. The system grows more fragile until it doesn’t work. Hydraulic leaks are bad. For the conservation of energy to work, the energy system must be closed.
#AES #Bitcoin §39 The Ring That Binds Them All
The magic money printer binds them all. The fiat oligarchy gets richer. Everyone else gets inflation. The Fed can print infinitum, and the other fiats around the world are debasing faster than the U.S. Dollar.
#AES #Bitcoin §38 OUR BROKEN MONETARY SYSTEM
The fiat oligarchy gets richer. Everyone else gets inflation. Slavery is a win-lose scenario. In the long run, with slavery and inflation, everyone loses. In a commodity-based monetary system, transactions are win-win. In the long run, everyone wins.
#AES #Bitcoin §37
Crypto is a Scam, Fiat Inflation Is Theft
Unlike crypto, Bitcoin is not a security. No liability attached. By definition, a security has a liability attached to it. The U.S. dollar has liability to the U.S. government…meaning the U.S. can debase it. Bitcoin cannot be debased. Less than twenty-one million units, forever. Bitcoin is owning a “bearer asset,” and a bearer asset means you hold it. Commodities, such as gold, fit into this asset class. Commodities do not have liabilities. Bitcoin is a commodity. The scarcest commodity ever created. After the 2024 halving, Bitcoin will be scarcer than gold.
Fiat is not a commodity. Crypto is not a commodity. This is why fiat and crypto are close cousins.
#AES #Bitcoin §35 Demonetizing Gold, but Not Bitcoin
After World War II, the Bretton Woods Agreement would return to an honest ledger. The U.S. dollar was pegged to gold. Then, Richard Nixon decoupled the U.S. dollar from the gold peg. The U.S. dollar departed from a commodity-based monetary system. Since 1971, the U.S. dollar has been fiat, and gold is increasingly demonetized with unnecessary friction. Now, cash is being demonetized with Know Your Customer (KYC) and Anti-Money Laundering (AML).
Fiat is easiest to debase for the purpose of creating artificially low fiat interest rates. Artificially low interest rates displace commodity-based monetary systems.
#AES #Bitcoin §34 Bitcoin – The First Decentralized Digital Ledger
No double-entry. No economically meaningless swaps obfuscating value, fraud, embezzlement, counterfeiting, or grand-theft inflation. No intermediary needed. No central bank.